Bonus Calculations – Explanation

Bonus calculations are a source of confusion to many. This article will point out the two different ways to pay bonuses and point out their differences as well as similarities. Users are often confused by the high PCB paid for the bonus. This article will give a better understanding of bonus pcb payments.

There are two methods that can be used to pay bonuses. 

  1. Pay Bonus separately with a separate payslip
  2. Pay bonus together with the month end salary.

The way these two bonus calculations are made in Actpay are requires different procedures. For details on paying bonus separately using Actpay please refer to the following article : http://actpayroll.com/kb/bonus-calculations/

Below is an explanation of the difference between “Calc Month” and “Calc Bonus”. In the following screen the user has clicked “Calc Bonus”. Therefore all the other fields are set to zero. The data in the Bonus group has all the information needed to print the bonus payslip.

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At the end of the month, the “Calc Month” button is clicked. Note that the End month pay = RM 6106.10, but the Gross income = 15,000. Although the gross income for the month inclusive of bonus is 15,000, the balance to be paid of the month is only 6,106.10. This value is after deducting the amount paid out for the bonus payments.

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Because of this, the month end payslip will display different for these two scenarios.

Following is an image of the Bonus Payslip paid separately. It only has info on bonus, epf and pcb.

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Below is the payslip with Bonus paid separately. Note the Gross Pay and End Month pay. The gross pay is the total wages for the month. The net income and the end month pay is the balance after payment of bonus earlier. Bonus is also not included in the payslip because it has been paid earlier.

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Below is that Payslip when Bonus is paid together with the Monthly pay. Bonus is listed in the payslip and Gross income and End Month pay are for the total month income.

Notes :

  1. PCB for Bonus is much higher than PCB for Basic pay. Bonus 7500 PCB = 1575.05, Basic 7500 PCB = 680.15. Bonus PCB is more than double the Basic PCN despite being the same amount.
  2. Both calculations YTD values are exactly the same despite being calculated differently. Therefore despite the different approaches the total EPF, PCB and total PCB and pay remain the same.

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We hope this article has given you a better understanding of bonus calculations in a payroll system.

 

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